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12 Apr 2013
Forex Flash: 4 possible reasons to be bullish the AUD - TDS
FXstreet.com (Barcelona) - It’s important to consider the risk scenarios that would see the AUD push even higher from current levels in H2 2013, says Singapore-based TDS analyst Alvin Pontoh.
Mr. Pontoh notes: "We outline four possible reasons to be bullish on the AUD below, in the order of most to least plausible 1) BOJ action and the carry trade (2) US recovery wobbles, QE extended (3) China accelerates, commodity price spikes (4) Strong domestic data, RBA hikes by year-end Implications."
"One key take away from the above is that further AUD strength will not necessarily be a result of a change in the RBA outlook. If a strong AUD is being driven by scenarios (1) to (3), i.e. external factors, further rate cuts — to support the economy, not to lower the currency — cannot be ruled out" the analyst adds.
Mr. Pontoh notes: "We outline four possible reasons to be bullish on the AUD below, in the order of most to least plausible 1) BOJ action and the carry trade (2) US recovery wobbles, QE extended (3) China accelerates, commodity price spikes (4) Strong domestic data, RBA hikes by year-end Implications."
"One key take away from the above is that further AUD strength will not necessarily be a result of a change in the RBA outlook. If a strong AUD is being driven by scenarios (1) to (3), i.e. external factors, further rate cuts — to support the economy, not to lower the currency — cannot be ruled out" the analyst adds.